The Marketing and Financial Functions of Property Management
One of the prime responsibilities of a property management company is to prepare a detailed budget for the successful operation of the property on a daily basis. This encompasses a study of all functional areas of the property for which required funds have to be assigned for optimal performance. The incoming revenue from rent has to be estimated and a realistic estimate of costs prepared for three other principle functional areas of operation. These include cost of tenant services as well as cost of maintenance and repairs, and administrative expenses.
Capital Expenditure Budgeting
If a property is allowed to deteriorate and become dated its rental value will decrease which in turn results in a compromised return on investment since the property becomes older. To counter-act deterioration, a long-term budget has to be developed. This has to cover the replacement of appliances, remodeling, and renovation to help maintain the property in pristine condition, and to enable it to command a high rental at least on par with equivalent newer properties. Capital expenses are not generally incurred in the years during which the expenditure is budgeted. Your accountant generally allows for depreciation which is provided for over the estimated useful life of the property. A depreciation account, which is set up for financing improvements and upgrading, carries tax advantages.
Budgeting for Advertising and Marketing
Though new tenants can be found and obtained through word of mouth, a more effective procedure is to develop an aggressive marketing plan which will need its own advertising budget. When you advertise a property, consistency is the key. A company should establish itself with periodic ads at regular intervals in the media which is known to be a source of information which prospective tenants subscribe to. Such media will also have established itself as a prime spring or well from which to generate tenants. It is also prudent to budget for enhanced marketing during a lean period of vacancy. A fabulous marketing strategy is to advertise and announce improvements, renovations, and remodels. And nothing is better than this than Facebook.
Putting the Act Together
A property management company is the representative of the owner and works with the owner toward a common objective, which is, to optimize rental income which by extension improves the return on investment. A primary strategy to achieve this objective is through preparation of a comprehensive budget.
The property management company must have complete knowledge of comparative properties in the neighborhood, what their features are, and the rental rate they are able to command. When preparing a budget the property management company must be realistic and dispassionate. All heads of expenditure must be catered for which include expenses for administration, repairs, and maintenance. All budgeting should revolve around maximizing rental prices.
A Sterling Company
Talley Properties Inc., is an old-established property management company which operates in the realm ofresidential and commercial properties in the Charlotte region of NC and its surrounding environs. Talley Properties has decades of experience in preparing budgets for optimizing rental values of properties and maintaining them in peak condition. If you are looking out for a property management company in the Charlotte region with a proven track record, then click on http://talleyproperties.com/.